Ukrainians on Universal Credit Offered Mortgage Help: Terms of Assistance.

Mortgage Help for Households Receiving State Benefits

According to The Sun: Households receiving state support, including Universal Credit, may access mortgage support if they face payment difficulties.

There is a little-known program, Support for Mortgage Interest (SMI), which can provide financial assistance of hundreds of pounds a month to those at risk of missing mortgage payments.

According to the government, around 200,000 households receiving Universal Credit have mortgage loans.

SMI is a loan intended to cover mortgage interest payments.

If you are receiving Universal Credit, SMI will help you pay interest on up to £200,000 of your mortgage.

Those receiving Pension Credit may receive assistance of up to £100,000.

Currently, the interest rate applied to SMI is 3.66%.

This means that if you have a remaining mortgage of £250,000 and qualify for SMI on up to £200,000, you will receive a loan at 3.66% annual interest.

This amounts to £7,320 per year or £610 per month.

It is important to note that SMI is not free assistance.

You will need to repay this loan as a lump sum upon the sale or transfer of ownership of your home, on which interest is charged.

However, the program is designed to support those facing payment difficulties, so the interest rate is relatively low.

Currently, the repayment rate for SMI is 4.5%.

The average remortgage rate is now 3.71% for two years fixed or 3.85% for five years, according to Moneyfacts.

The government can change the SMI rate twice a year.

If you pass away before repaying the SMI loan, it does not need to be repaid if your home remains owned by your partner.

However, if your partner or anyone else sells the property, the loan must be repaid.

If you are facing payment difficulties, first contact your mortgage lender for assistance.

Who Is Eligible for SMI?

You can apply for SMI if you receive Universal Credit or other specific benefits.

Other qualifying benefits include:

• Income Support
• Income-based Jobseeker's Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Pension Credit

The scheme was expanded in 2023 to allow more people to qualify for assistance.

Under the new rules, you must have been receiving Universal Credit for at least three months to apply.

Previously, eligibility for this program was limited to those who had received Universal Credit for at least nine months.

If you receive Pension Credit, you can start receiving the loan immediately.

Those on Income Support, JSA, or ESA on a means-tested basis must be on those benefits for 39 consecutive weeks.

How to Apply?

To find out if you qualify for SMI, contact the agency that pays your benefits.If you receive or have applied for Income Support, JSA, or ESA, contact Jobcentre Plus.

You can do this by calling 0800 169 0310.

If you receive or have applied for Pension Credit, contact the Pension Service at 0800 731 0469.

Those receiving Universal Credit can:

• Add a message to their journal on their Universal Credit account
• Contact the Universal Credit helpline at 0800 328 5644.

What Other Mortgage Help Is Available?

Mortgage arrears can seriously damage your credit history.

If you are facing difficulties for an extended period, lenders may start legal proceedings that could lead to the loss of your home.

If you suspect that you may encounter payment issues, contact your lender immediately.

They may offer assistance in such situations.

You may temporarily request to switch to interest-only payments or extend the term to reduce monthly payments.

It is not mandatory to switch to interest-only payments or extend the term to reduce monthly payments.

If you decide to return to the original plan within six months, it will not impact your credit history.

Also, ask your lender about the 'Breathing Space' program if you think you will be unable to make payments.

Under this program, debts do not accrue interest, and there will be no fees for 60 days.

You will be provided protection from debt collectors.

There is also the possibility of applying for payment holidays, during which no payments are required.

However, be aware that interest and fees may accrue, and all missed payments will need to be repaid in the future.

Each company has its own policy, so you should reach out and find out what help is available.

Other options include contacting your local council to find out if there are programs to support families in financial difficulty.

For example, the Household Support Fund may offer free cash, food vouchers, or assistance with bills.

It is also worth checking what your council specifically offers, as this can vary by region.

Another option is to check if there are other benefits you may be entitled to.

The free Entitledto calculator can help determine your eligibility for various benefits, tax credits, and Universal Credit.

The charity StepChange also offers a free benefits check service that does not record your results.